Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessee-firm disclosed an income of Rs. 50,000 for each of assessment years 1970-71 to 1974-75 under Voluntary Disclosure Scheme - Subsequently, unaccounted sum of Rs. 4 lakhs was detected on search - This sum of Rs. 4 lakhs was spread over five years on request of assessee, i.e., Rs. 80,000 in each of said years - Whether Tribunal was justified in upholding levy of penalty of Rs. 30,000 in each of said years in view of above facts - Held, yes Facts The assessee-firm had filed its returns for the assessment years 1970-71 to 1974-75 which were pending in appeal. While so there was a search of the assessee's premises on 7-6-1975 in which several incriminating hooks and documents were seized. On 31-7-1975 the original assessments for the aforesaid years were set aside by the Tribunal and fresh assessments were directed to be made. Thereafter, in December 1975 the assessee made a voluntary disclosure under the Voluntary Disclosure of Income and Wealth Ordinance, 1975. The sum disclosed was an amount of Rs. 50,000 for each of the above assessment years. The ITO, however, found a difference of Rs. 4 lakhs as unaccounted money. The unaccounted money was spread over in equal proportion for the above five years at the request of the assessee. On this basis, an amount of Rs. 80,000 was added towards the income for each one of these years. Penalty proceedings were initiated and as the assessee had declared Rs. 50,000 for each year during voluntary disclosure, a penalty of Rs. 30,000 was levied as exigible for each year by the IAC. On appeal, the Tribunal also sustained the penalty. On reference : Held The question, as to whether the penalty is exigible in a particular case, is ordinarily a question of fact. The Tribunal had in the instant case, for very valid reasons held that the assessee had suppressed its business income and that concealment was established in respect of Rs. 80,000. The said finding was based on ample materials. Thus, the penalty of Rs. 30,000 for each year ultimately sustained, was valid. Accordingly, the order of the Tribunal was to be upheld. Case referred to CIT…

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